In trading on Wednesday, shares of Prudential Financial, Inc. (NYSE:PRU) were yielding above the 3% mark based on its annual dividend (annualized to $1.45), with the stock changing hands as low as $47.68 on the day. Dividends are particularly important for investors to consider, because historically speaking dividends have provided a considerable share of the stock market's total return. To illustrate, suppose for example you purchased shares of the S&P 500 ETF (SPY) back on 12/31/1998 — you would have paid $123.31 per share. Fast forward to 12/31/2011 and each share was worth $125.50 on that date, a mere $2.19 or 1.8% increase over all those years. But now consider that you collected a whopping $23.90 per share in dividends over the same period, increasing your return to 21.15%. Even with dividends reinvested, that only amounts to an average annual total return of about 1.7%; so by comparison collecting a yield above 3% would appear considerably attractive if that yield is sustainable. Prudential Financial, Inc. (NYSE:PRU) is an S&P 500 company, giving it special status as one of the large-cap companies making up the S&P 500 Index.

In general, dividend amounts are not always predictable and tend to follow the ups and downs of profitability at each company. In the case of Prudential Financial, Inc., looking at the history chart for PRU below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 3% annual yield.

PRU Dividend History

Date

Div*

11/18/11

1.450

11/19/10

1.150

11/20/09

0.700

11/20/08

0.580

11/21/07

1.150

11/22/06

0.950

11/18/05

0.780

11/19/04

0.625

11/21/03

0.500

11/21/02

0.400

* Data may be adjusted for splits; we are not responsible for data errors; always verify data with the company.

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